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Copyright holders enjoy a series of exclusive rights over their creative works. Among the most potentially expansive of those rights is the ability to control so-called "derivative works." Derivative works are new creative works that are "derived from" existing creative works. How do these rights work, and how far can your copyright protection extend?
The exclusive rights afforded to a copyright holder are contained in 17 U.S.C. § 106 of the Copyright Act of 1976. Many of the rights listed there will probably seem obvious to you, such as the exclusive right to make copies or publicly perform your copyrighted work. It makes sense that a copyright holder should be entitled to prevent a third party, an outsider, from infringing on works in those ways.
Less obvious are the rights over derivative works. According to U.S. law (17 U.S.C. § 101), a derivative work is one "based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted."
There are many examples of derivative works, among them:
Some derivative works are closer to the original work than others. A translation is perhaps the "closest" form of a derivative work. Imagine that you write a romance novel in English, and someone comes along and translates it into French and begins selling it to French speakers, pocketing all of the profit. That individual might try to claim that he or she did not engage in copyright infringement, because the written work produced in French is totally different from yours—quite literally every single word and sentence is different when one compares the two books.
Fortunately, you would be able to counter the argument based upon your right to control derivative works that are based on your original. Only you are permitted to translate (or authorize the translation) of your copyrighted work.
Some derivative works are more different from the original work.
Consider the same romance novel as the example above, but this time, someone comes along and decides to make it into a major motion picture. She takes your characters, your plot, and your dialogue, but changes the medium from the written page to the silver screen. Here too, that third party might argue that she did not commit copyright infringement. After all, the two works—a book and a movie—are totally different in style and execution. Nevertheless, you could once again counter that your copyright has been infringed because of the exclusive ability to control derivative works. This includes the ability to adapt your work into another medium of expression.
Indeed, this is why you often hear of authors and artists "selling their rights" to their creations. Copyrights, like other forms of property, can be transferred (usually for money). Often, the creator of the initial work is not well positioned to actually create the derivative work, even if there would be a strong market. A fiction writer is ill-prepared to cast, direct, or film a movie. Thus it makes sense for to sell the rights—whether for a lump sump payment or for some sort of royalty based upon future revenue—to a movie studio or producer.
To maximize your control over derivative works, be sure to register your original work with the U.S. Copyright Office, the federal agency that controls copyright administration. You might also wish to speak to an experienced intellectual property lawyer, so as to fully understand the scope of your protections and how to stop others from making derivative works.